[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 890 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 890

To amend title VI of the Public Utility Regulatory Policies Act of 1978 
   to establish a Federal renewable electricity standard for certain 
              electric utilities, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 4, 2009

Mr. Markey of Massachusetts (for himself and Mr. Platts) introduced the 
   following bill; which was referred to the Committee on Energy and 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
To amend title VI of the Public Utility Regulatory Policies Act of 1978 
   to establish a Federal renewable electricity standard for certain 
              electric utilities, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Renewable Energy Act''.

SEC. 2. FEDERAL RENEWABLE ELECTRICITY STANDARD.

    (a) In General.--Title VI of the Public Utility Regulatory Policies 
Act of 1978 (16 U.S.C. 2601 and following) is amended by adding at the 
end the following:

``SEC. 610. FEDERAL RENEWABLE ELECTRICITY STANDARD.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Affiliate.--The term `affiliate' when used in 
        relation to a person, means another person which owns or 
        controls, is owned or controlled by, or is under common 
        ownership or control with, such person, as determined under 
        regulations promulgated by the Secretary.
            ``(2) Biomass.--
                    ``(A) In general.--The term `biomass' means each of 
                the following:
                            ``(i) Cellulosic (plant fiber) organic 
                        materials from a plant that is planted for the 
                        purpose of being used to produce energy.
                            ``(ii) Nonhazardous, plant or algal matter 
                        that is derived from any of the following:
                                    ``(I) An agricultural crop, crop 
                                byproduct or residue resource.
                                    ``(II) Waste such as landscape or 
                                right-of-way trimmings (but not 
                                including municipal solid waste, 
                                recyclable postconsumer waste paper, 
                                painted, treated, or pressurized wood, 
                                or wood contaminated with plastic or 
                                metals).
                            ``(iii) Animal waste or animal byproducts, 
                        including products of animal waste digesters.
                    ``(B) Biomass from federal lands.--
                            ``(i) Covered materials.--With respect to 
                        organic material removed from Federal land, the 
                        term `biomass' covers only organic material 
                        from--
                                    ``(I) ecological forest 
                                restoration;
                                    ``(II) pre-commercial thinnings;
                                    ``(III) brush;
                                    ``(IV) mill residues; and
                                    ``(V) slash.
                            ``(ii) Exclusion of certain lands.--
                        Notwithstanding clause (i), material or matter 
                        that would otherwise qualify as biomass are not 
                        included in the term `biomass' if it is located 
                        on Federal land in the following categories:
                                    ``(I) Federal land containing old 
                                growth forest or late successional 
                                forest, unless the Secretary of the 
                                Interior or the Secretary of 
                                Agriculture (whichever has 
                                administrative jurisdiction over such 
                                land) determines that the removal or 
                                organic material from such land is 
                                appropriate for the applicable forest 
                                type and maximizes the retention of 
                                late-successional and large and old 
                                growth trees, late successional and old 
                                growth forest structure, and late-
                                successional and old growth forest 
                                composition.
                                    ``(II) Federal land on which the 
                                removal of vegetation is prohibited, 
                                including components of the National 
                                Wilderness Preservation System.
                                    ``(III) Wilderness Study Areas.
                                    ``(IV) Inventoried Roadless Areas.
                                    ``(V) Units of the National 
                                Landscape Conservation System.
                                    ``(VI) National Monuments.
            ``(3) Distributed generation facility.--The term 
        `distributed generation facility' means a facility that--
                    ``(A) generates renewable electricity other than by 
                means of combustion;
                    ``(B) primarily serves 1 or more electricity 
                consumers at or near the facility site; and
                    ``(C) is no larger than 2 megawatts in capacity.
            ``(4) Federal alternative compliance payment.--The term 
        `Federal alternative compliance payment' means a payment, to be 
        submitted in lieu of 1 Federal renewable electricity credit, 
        pursuant to subsection (c)(3).
            ``(5) Federal land.--The term `Federal land' means land 
        owned by the United States and under the administrative 
        jurisdiction of the Secretary of the Interior or the Secretary 
        of Agriculture, other than land held in trust for an Indian or 
        Indian tribe.
            ``(6) Federal renewable electricity credit.--The term 
        `Federal renewable electricity credit' means a credit, 
        representing one kilowatt hour of renewable electricity, issued 
        pursuant to subsection (d).
            ``(7) Fund.--The term `Fund' means the Renewable 
        Electricity Deployment Fund established under subsection (f).
            ``(8) Inventoried roadless area.--The term `Inventoried 
        Roadless Area' means one of the areas identified in the set of 
        inventoried roadless areas maps contained in the Forest Service 
        Roadless Areas Conservation, Final Environmental Impact 
        Statement, Volume 2, dated November 2000.
            ``(9) Qualified hydropower.--The term `qualified 
        hydropower' means--
                    ``(A) electricity generated solely from increased 
                efficiency achieved, or additions of capacity made, on 
                or after January 1, 2001 at a hydroelectric facility 
                that was placed in service before that date; or
                    ``(B) electricity generated from generating 
                capacity added on or after January 1, 2001 to a dam 
                that did not previously have the capacity to generate 
                electricity, provided that the Commission certifies 
                that--
                            ``(i) the dam was placed in service before 
                        the date of the enactment of this section and 
                        was operated for flood control, navigation, or 
                        water supply purposes and did not produce 
                        hydroelectric power before January 1, 2001;
                            ``(ii) the hydroelectric project installed 
                        on the dam is licensed by the Commission and 
                        meets all other applicable environmental, 
                        licensing, and regulatory requirements, 
                        including applicable fish passage requirements; 
                        and
                            ``(iii) the hydroelectric project installed 
                        on the dam is operated so that the water 
                        surface elevation at any given location and 
                        time that would have occurred in the absence of 
                        the hydroelectric project is maintained, 
                        subject to any license requirements that 
                        require changes in water surface elevation for 
                        the purpose of improving the environmental 
                        quality of the affected waterway.
            ``(10) Renewable electricity.--The term `renewable 
        electricity' means electricity generated from a renewable 
        energy resource.
            ``(11) Renewable energy resource.--The term `renewable 
        energy resource' means each of the following:
                    ``(A) wind energy;
                    ``(B) solar energy;
                    ``(C) geothermal energy;
                    ``(D) combustion of biomass or landfill gas;
                    ``(E) qualified hydropower; or
                    ``(F) marine and hydrokinetic renewable energy, as 
                that term is defined in section 632 of the Energy 
                Independence and Security Act of 2007 (42 U.S.C. 
                17211).
            ``(12) Retail electric supplier.--
                    ``(A) In general.--The term `retail electric 
                supplier' means, for any given year, an electric 
                utility that sold not less than 1,000,000 megawatt 
                hours of electric energy to electric consumers for 
                purposes other than resale during the preceding 
                calendar year.
                    ``(B) Inclusions and limitations.--For purposes of 
                determining whether an electric utility qualifies as a 
                retail electric supplier under subparagraph (A)--
                            ``(i) the sales of any affiliate of an 
                        electric utility to electric consumers for 
                        purposes other than resale shall be considered 
                        to be sales of such electric utility; and
                            ``(ii) sales by any electric utility to a 
                        parent company or to other affiliates of such 
                        electric utility shall not be treated as sales 
                        to electric consumers.
            ``(13) Retail electric supplier's base amount.--The term 
        `retail electric supplier's base amount' means the total amount 
        of electric energy sold by the retail electric supplier, 
        expressed in terms of kilowatt hours, to electric customers for 
        purposes other than resale during the relevant calendar year, 
        excluding electricity generated by--
                    ``(A) a hydroelectric facility that is not 
                qualified hydropower; or
                    ``(B) combustion of municipal solid waste.
            ``(14) Retire and retirement.--The terms `retire' and 
        `retirement' with respect to a Federal renewable electricity 
        credit, means to disqualify such credit for any subsequent use 
        under this section, regardless of whether the use is a sale, 
        transfer, exchange, or submission in satisfaction of a 
        compliance obligation.
    ``(b) Establishment of Program.--Not later than 1 year after the 
date of enactment of this section, the Secretary shall, by regulation, 
establish a program to implement and enforce the requirements of this 
section. In establishing such program, the Secretary shall, to the 
extent practicable--
            ``(1) preserve the integrity, and incorporate best 
        practices, of existing State renewable electricity programs;
            ``(2) rely upon existing and emerging State or regional 
        tracking systems that issue and track non-Federal renewable 
        electricity credits; and
            ``(3) cooperate with the States to facilitate coordination 
        between State and Federal renewable electricity programs and to 
        minimize administrative burdens and costs to retail electric 
        suppliers.
    ``(c) Annual Compliance Requirement.--
            ``(1) In general.--For each of calendar years 2012 through 
        2039, each retail electric supplier shall, not later than April 
        1 of the following calendar year, submit to the Secretary a 
        quantity of Federal renewable electricity credits equal to the 
        retail electric supplier's base amount for the calendar year 
        multiplied by the required annual percentage set forth in 
        paragraph (2).
            ``(2) Required annual percentage.--For each of calendar 
        years 2012 through 2039, the required annual percentage shall 
        be as follows:


 
            ``Calendar year                 Required annual percentage
 
2012...................................  6.0
2013...................................  6.0
2014...................................  8.5
2015...................................  8.5
2016...................................  11.0
2017...................................  11.0
2018...................................  14.0
2019...................................  14.0
2020...................................  17.5
2021...................................  17.5
2022...................................  21.0
2023...................................  21.0
2024...................................  23.0
2025 through 2039......................  25.0
 

            ``(3) Alternative compliance payments.--A retail electric 
        supplier may satisfy the requirements of paragraph (1) in whole 
        or in part by submitting in lieu of each Federal renewable 
        electricity credit, a payment equal to the lesser of--
                    ``(A) 200 percent of the average market value of a 
                Federal renewable electricity credit for the previous 
                compliance year, as determined by the Secretary; or
                    ``(B) 5 cents, adjusted on January 1 of each year 
                following calendar year 2009 based on the Gross 
                Domestic Product Implicit Price Deflator.
            ``(4) Use of payments.--Alternative compliance payments 
        submitted pursuant to paragraph (3) shall be deposited in the 
        Fund established under subsection (f).
    ``(d) Issuance of Federal Renewable Electricity Credits.--
            ``(1) Credit issuance.--The regulations promulgated under 
        subsection (b) shall include provisions governing the issuance, 
        tracking, and retirement of Federal renewable electricity 
        credits. Except as provided in paragraphs (2), (3), and (4) of 
        this subsection, the Secretary shall issue to each generator of 
        renewable electricity, 1 Federal renewable electricity credit 
        for each kilowatt hour of renewable electricity generated by 
        such generator.
            ``(2) Generation from state renewable electricity programs 
        using central procurement and from state alternative compliance 
        payments.--Where renewable electricity is generated with the 
        support of payments from a retail electric supplier pursuant to 
        a State renewable electricity program (whether through State 
        alternative compliance payments or through payments to a State 
        renewable electricity procurement fund or entity), the 
        Secretary shall issue Federal renewable electricity credits to 
        such retail electric supplier for the proportion of the 
        relevant renewable electricity generation that is attributable 
        to the retail electric supplier's payments, as determined 
        pursuant to regulations issued by the Secretary. For any 
        remaining portion of the relevant renewable electricity 
        generation, the Secretary shall issue Federal renewable 
        electricity credits to the generator, as provided in paragraph 
        (1), provided that in no event shall more than 1 Federal 
        renewable electricity credit be issued for the same kilowatt 
        hour of electricity. In determining how Federal renewable 
        electricity credits will be apportioned among retail electric 
        suppliers and generators in such circumstances, the Secretary 
        shall consider information and guidance furnished by the 
        relevant State or States.
            ``(3) Certain power sales contracts.--When a generator has 
        sold renewable electricity to a retail electric supplier under 
        a contract for power from a facility placed in service before 
        the date of enactment of this section, and the contract does 
        not provide for the determination of ownership of the Federal 
        renewable electricity credits associated with such generation, 
        the Secretary shall issue such Federal renewable electricity 
        credits to the retail electric supplier for the duration of the 
        contract.
            ``(4) Credit multiplier for distributed generation.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall issue 3 Federal 
                renewable electricity credits for each kilowatt hour of 
                renewable electricity generated by a distributed 
                generation facility.
                    ``(B) Adjustment.--Except as provided in 
                subparagraph (C), not later than January 1, 2014, and 
                not less frequently than every 4 years thereafter, the 
                Secretary shall review the effect of this paragraph and 
                shall, as necessary, reduce the number of Federal 
                renewable electricity credits per kilowatt hour issued 
                under this paragraph, but not below 1, to ensure that 
                such number is no higher than the Secretary determines 
                is necessary to make distributed generation facilities 
                cost competitive with other sources of renewable 
                electricity generation.
                    ``(C) Facilities placed in service after 
                enactment.--For any distributed generation facility 
                placed in service after the date of enactment of this 
                section, subparagraph (B) shall not apply for the first 
                10 years after date of enactment. For each year during 
                such 10-year period, the Secretary shall issue the 
                facility the same number of Federal renewable 
                electricity credits per kilowatt hour as are issued to 
                that facility in the year in which such facility is 
                placed in service. After such 10-year period, the 
                Secretary shall issue Federal renewable energy credits 
                to the facility in accordance with the current 
                multiplier as determined pursuant to subparagraph (B).
            ``(5) Credits based on incremental hydropower.--For 
        purposes of this subsection, the number of Federal renewable 
        electricity credits issued for qualifying hydropower described 
        in subsection (a)(9)(A) shall be calculated--
                    ``(A) based solely on the increase in average 
                annual generation directly resulting from the 
                efficiency improvements or capacity additions described 
                in subsection (a)(9)(A); and
                    ``(B) using the same water flow information used to 
                determine a historic average annual generation baseline 
                for the hydroelectric facility, as certified by the 
                Secretary or by the Commission.
            ``(6) Generation from mixed renewable and non-renewable 
        resources.--If electricity is generated using both a renewable 
        energy resource and an energy source that is not a renewable 
        energy resource (as, for example, in the case of co-firing of 
        biomass and fossil fuel), the Secretary shall issue Federal 
        renewable electricity credits based on the proportion of the 
        electricity that is attributable to the renewable energy 
        resource.
            ``(7) Prohibition against double-counting.--Except as 
        provided in paragraph (4) of this subsection, the Secretary 
        shall ensure that no more than 1 Federal renewable electricity 
        credit will be issued for any kilowatt hour of renewable 
        electricity and that no Federal renewable electricity credit 
        will be used more than once for compliance with this section.
    ``(e) Trading and Banking of Credits.--
            ``(1) Trading.--The lawful holder of a Federal renewable 
        electricity credit may sell, exchange, transfer, submit for 
        compliance in accordance with subsection (c), or submit such 
        credit for retirement by the Secretary.
            ``(2) Banking.--A Federal renewable electricity credit may 
        be submitted in satisfaction of the compliance obligation set 
        forth in subsection (c) for the compliance year in which the 
        credit was issued or for any of the 3 immediately subsequent 
        compliance years. The Secretary shall retire any Federal 
        renewable electricity credit that has not been submitted under 
        subsection (c) by the deadline for the compliance year that is 
        3 years after the compliance year in which the credit was 
        issued.
            ``(3) Delegation of market administration.--The Secretary 
        may delegate to one or more appropriate market-making entities 
        the administration of a Federal renewable electricity credit 
        market for purposes of creating a transparent and efficient 
        national market.
            ``(4) Oversight.--The Commission, in consultation with the 
        Secretary and relevant Federal agencies, may prescribe such 
        rules as the Commissioner determines necessary to ensure the 
        transparency, fairness, and stability of the market in Federal 
        renewable electricity credits and any derivative instruments 
        based on such credits.
    ``(f) Renewable Electricity Deployment Fund.--
            ``(1) In general.--There is established in the Treasury of 
        the United States a Renewable Electricity Deployment Fund.
            ``(2) Deposits.--All Federal alternative compliance 
        payments submitted to the Secretary pursuant to subsection 
        (c)(3) and civil penalties assessed under this section shall be 
        deposited into the Fund.
            ``(3) Use.--
                    ``(A) In general.--Amounts deposited in the Fund 
                shall be available exclusively for use by the 
                Secretary, subject to appropriations, to make payments 
                to retail electric suppliers in accordance with 
                subparagraph (B).
                    ``(B) Allocation.--Not later than May 1 of each 
                year from 2013 through 2040, the Secretary shall 
                distribute amounts deposited in the Fund during the 
                preceding 12-month period among the retail electric 
                suppliers which have submitted Federal renewable 
                electricity credits to the Secretary in total or 
                partial compliance with their obligations under 
                subsection (c) for the preceding calendar year. Each 
                retail electric supplier shall receive a payment equal 
                to the product of--
                            ``(i) the total payments made to all retail 
                        electric suppliers under this subsection; and
                            ``(ii) the quotient obtained by dividing 
                        the quantity specified in subclause (I) by the 
                        quantity specified in subclause (II):
                                    ``(I) The quantity of Federal 
                                renewable electricity credits submitted 
                                by the retail electric supplier for the 
                                preceding calendar year pursuant to 
                                subsection (c).
                                    ``(II) The total quantity of 
                                Federal renewable electricity credits 
                                submitted by all retail electric 
                                suppliers for the preceding calendar 
                                year pursuant to subsection (c).
    ``(g) Information Collection.--In accordance with section 13 of the 
Federal Energy Administration Act of 1974 (15 U.S.C. 772), the 
Secretary may require any retail electric supplier, renewable 
electricity generator, or such other entities as the Secretary deems 
appropriate, to provide any information the Secretary determines 
appropriate to carry out this section.
    ``(h) Enforcement and Judicial Review.--
            ``(1) Civil penalty.--If any person fails to comply with 
        the requirements of subsection (c), such person shall be liable 
        to pay to the Secretary a civil penalty equal to the product 
        of--
                    ``(A) double the Federal alternative compliance 
                payment calculated under subsection (c)(3), and
                    ``(B) the aggregate quantity of Federal renewable 
                electricity credits (or equivalent Federal alternative 
                compliance payments) that the person failed to submit 
                to the Secretary in violation of the requirements of 
                subsection (c).
            ``(2) Enforcement.--The Secretary shall assess a civil 
        penalty under paragraph (1) in accordance with the procedures 
        described in section 333(d) of the Energy Policy and 
        Conservation Act of 1954 (42 U.S.C. 6303).
            ``(3) Judicial review.--Any person who will be adversely 
        affected by a final action taken by the Secretary under this 
        section, other than the assessment of a civil penalty under 
        this subsection, may use the procedures for review described in 
        section 336(b) of the Energy Policy and Conservation Act (42 
        U.S.C. 6306). For purposes of this paragraph, references to a 
        rule in section 336(b) of the Energy Policy and Conservation 
        Act shall be deemed to refer also to all other final actions of 
        the Secretary under this section other than the assessment of a 
        civil penalty under this subsection.
    ``(i) Savings Provisions.--Nothing in this section shall--
            ``(1) diminish or qualify any authority of a State or 
        political subdivision of a State to--
                    ``(A) adopt or enforce any law or regulation 
                respecting renewable electricity, including programs 
                that exceed the required amount of renewable 
                electricity under this section, provided that no such 
                law or regulation may relieve any person of any 
                requirement otherwise applicable under this section; or
                    ``(B) regulate the acquisition and disposition of 
                Federal renewable electricity credits by retail 
                electric suppliers located within the territory of such 
                State or political subdivision, including the authority 
                to require such retail electric supplier to acquire and 
                retire Federal renewable electricity credits associated 
                with electric energy it sells to end-use customers; or
            ``(2) affect the application of, or the responsibility for 
        compliance with, any other provision of law or regulation, 
        including environmental and licensing requirements.
    ``(j) Cost Recovery.--An electric utility, the retail electricity 
sales of which are subject to rate regulation, shall not be denied the 
opportunity to recover the full amount of the prudently incurred 
incremental cost of renewable electricity or Federal renewable 
electricity credits obtained, or alternative compliance payments made, 
to comply with the requirements of subsection (c).
    ``(k) Program Review.--
            ``(1) National academy of sciences review.--The Secretary 
        shall enter into a contract with the National Academy of 
        Sciences under which the Academy shall, not later than July 1, 
        2017, and every 5 years thereafter through 2032, submit to the 
        Secretary and to Congress a comprehensive evaluation of all 
        aspects of the program established under this section, 
        including--
                    ``(A) an evaluation of the effectiveness of the 
                program, including its specific design elements, in 
                increasing the market penetration and lowering the cost 
                of the eligible renewable electricity generation 
                technologies;
                    ``(B) the opportunities for any additional 
                technologies and sources of renewable electricity 
                generation that have emerged since enactment of this 
                section;
                    ``(C) the program's impact on the regional 
                diversity and reliability of electricity supply;
                    ``(D) the net benefits or costs of the program to 
                the national and State economies, including effects on 
                retail electricity costs, economic development benefits 
                of investment, environmental benefits, impacts on 
                natural gas demand and price, and avoided costs related 
                to environmental and congestion mitigation investments 
                that otherwise would have been required;
                    ``(E) an assessment of the benefits and costs of 
                increasing or extending the renewable electricity 
                requirements set forth in subsection (c) of this 
                section; and
                    ``(F) recommendations regarding potential changes 
                to this section, to regulations and procedures for 
                implementing this section, or to related public 
                policies.
            ``(2) Recommendations to congress.--Not later than January 
        1, 2018, and every 5 years thereafter through 2033, the 
        Secretary shall transmit to the Committee on Energy and 
        Commerce of the United States House of Representatives and the 
        Committee on Energy and Natural Resources of the United States 
        Senate a report making recommendations for modifications and 
        improvements to the program established under this section and 
        any related programs, including an explanation of the 
        inconsistencies, if any, between the Secretary's 
        recommendations and those included in the National Academy of 
        Sciences evaluation under paragraph (1).
    ``(l) Sunset.--This section expires on December 31, 2040.''.
    (b) Table of Contents Amendment.--The table of contents of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 and 
following) is amended by adding at the end of the items relating to 
title VI the following:

``SEC. 610. FEDERAL RENEWABLE ELECTRICITY STANDARD.''.

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